PKX - POSCO

[PlanMaestro]

Posco calls off Rs 32,000 crore steel project in Karnataka

http://www.dailymail.co.uk/indiahome/indianews/article-2358411/Posco-calls-Rs-32-000-crore-steel-project-Karnataka.html#ixzz2Yb5kroG9

[Kiltacular]

Posco calls off Rs 32,000 crore steel project in Karnataka

http://www.dailymail.co.uk/indiahome/indianews/article-2358411/Posco-calls-Rs-32-000-crore-steel-project-Karnataka.html#ixzz2Yb5kroG9

 

It looks like PKX was using this proposed mill as leverage for the Odisha mill.

[alwaysinvert]

I put this on my watchlist

But frankly what's happening in China really really scared me

 

I won't touch these things until

1) they show negtive earning

2) China financial system has a major shake

3) or, suddenly for whatever reason I don't know, this one suddenly drops to a ridiculous valuation. Now it's cheap, but not ridiculously cheap

 

even if this is a very well organized low cost steel producer......

 

http://www.economist.com/news/business/21580458-worlds-overcapacity-steelmaking-getting-worse-and-profits-are-evaporating-inferno

 

Nice chart too, thanks.

 

http://farm6.staticflickr.com/5337/9251940622_e2d55a8198_o.png

I'm not quite sure how you can say it's cheap and still be too worried about negative impacts to invest. Either it's cheap (enough) and you buy or it's not. Everything else is market timing. To me this is a 50 cent dollar, but I could certainly be wrong - these issues may be as bad as the market thinks or even worse and then I won't do very well. Anyhow, I'm fairly sure you won't get this thing for $20b if iron ore plummets or when the mills are running over full capacity.

 

The future is never clear. You pay a very high price in the stock market for a cheery consensus. Uncertainty is the friend of the buyer of long-term values.

[PlanMaestro]

POSCO may soon get iron ore licence for Odisha plant

http://uk.finance.yahoo.com/news/posco-set-india-iron-ore-141607537.html

[Kiltacular]

ArcelorMittal Joins Posco to Scrap India Steel Projects

Sub. may be required: http://online.wsj.com/article/SB10001424127887324448104578611691330921694.html?cb=logged0.5998530703796343

 

By SAURABH CHATURVEDI

And BIMAN MUKHERJI

 

NEW DELHI—ArcelorMittal MT +1.22% said Wednesday it is dropping plans to build a factory in the eastern Indian state of Orissa, becoming the second global steelmaker after Posco 005490.SE +0.64% to pull out of multi-billion-dollar projects in the country this week.

 

Luxembourg-based ArcelorMittal, the world's largest steelmaker by production capacity, said delays in acquiring land, uncertainties over iron-ore supplies and deteriorating market conditions led it to scrap the project to manufacture 12 million metric tons of steel a year. ArcelorMittal didn't provide the investment it planned for the plant. On Tuesday, South Korea's Posco also cited similar reasons for giving up its plans to build a six-million-ton steel mill at a cost of $5.3 billion in the southwestern Karnataka state.

 

These were among the biggest foreign-investment proposals in India and the pullouts deal a big blow to New Delhi's efforts to attract long-term overseas capital. Late Tuesday, the government said it would liberalize foreign-investment rules in several sectors as part of efforts to boost economic growth that hit a decade-low of 5% in the fiscal year ended March 31.

[Kiltacular]

http://www.rttnews.com/2154714/posco-may-commence-work-on-12-bln-odisha-project-soon.aspx?type=in&utm_source=google&utm_campaign=sitemap

 

7/22/2013 2:20 AM ET

 

 

 

South Korean steel giant Posco may commence work on $12 billion project at Jagatsinghpur, as the transfer of the entire 2,700 acres of land required for the project will be completed soon, reports, quoting Odisha Steel and Mines Minister Rajni Kant Singh.

 

He said, "We hope Posco will begin work on the project soon. The state government has completed the task of land acquisition for the first phase of the project and would transfer remaining around 1,000 acres of land to it soon."

 

The moves comes barely a few days after the world's largest steel maker ArcelorMittal dropped its $12 billion project in the state, and Posco pulled out the $6 billion project in Karnataka.

 

Posco needed 2,700 acres to commence work on first phase of the project, while the state government already transferred 1,700 acres to Posco.

 

Confirming the development, a Posco official said the work might commence soon on the project after the government hands over entire 2,700 acres of the land to it. He added that if everything goes as planned, the Phase 1 of the project might be commissioned in 2018.

 

Phase II would be completed three years after completion of Phase I, while Phase III will be commissioned within three years after Phase II, the official said....

[alwaysinvert]

Posco Q2 earnings out yesterday:

 

http://online.wsj.com/article/SB10001424127887324564704578627561116763682.html

http://www.posco.com/homepage/docs/eng3/dn/invest/archive/2013_2Q_Presentation_eng_final.pdf

http://www.posco.com/homepage/docs/eng3/dn/invest/archive/2013_2Q_Presentation_Q&A.pdf

[alwaysinvert]

We expect total capex to decrease by roughly KRW 1~2 trillion from next year mainly due to completion of overseas steel projects.

 

It is true that Odisha project could be a potential factor behind capex increase. However, we will proceed with the project when all conditions are met. Moreover,

we could partner with other investors to lessen our burden and will determine how much we will spend considering our cash flow. Our total consolidated capex will start decreasing from next year, which will mostly be from steel sector. Recurring maintenance for Pohang and Gwangyang Works will remain steady, but there won’t be a large scale new investment except for the Odisha project.

[Liberty]

http://www.economist.com/news/business/21580458-worlds-overcapacity-steelmaking-getting-worse-and-profits-are-evaporating-inferno

 

Overview of steel industry. Note, article is a month old.

[alwaysinvert]

http://www.economist.com/news/business/21580458-worlds-overcapacity-steelmaking-getting-worse-and-profits-are-evaporating-inferno

 

Overview of steel industry. Note, article is a month old.

It was linked a month ago too :)

[Liberty]

Sorry, my bad  :)

[alwaysinvert]

http://www.adventuresincapitalism.com/post/2013/08/07/Potash-Will-Not-Go-The-Way-Of-Iron-Ore.aspx

 

Take iron ore. Starting in early in 2003 iron prices began a climb that has still not fallen back to earth. In the process, the big 3 iron ore players (Vale, BHP Billiton and Rio Tinto Group) made true fortunes. However, they got greedy. They forced buyers to purchase iron ore using annual contracts rather than the spot market—they effectively colluded to push the price of iron ore upwards and forced the Chinese to overpay. They sold iron ore for a few times what it cost to produce.

 

By making too much money and making iron ore mining not look risky, these three miners set up their own downfall. Eventually, marginal mines were funded (particularly the massive new mines owned by Fortescue Metals Group)—the returns on capital were just too juicy for investors not to fund them. These mines are now being built and are starting to ramp up. Dozens of other mines are being contemplated. By allowing new mining companies to tout massively profitable business plans, the big players have allowed their competition to blossom. Iron ore prices will eventually head down to the marginal cost of production. Prices may even stay below the cost of production—once the thing is built, you don’t want to cease production—even if you are losing money. It’s usually better to just keep producing and hope for higher prices. Iron ore will have a structural supply overhang for quite some time. As an industry, it’s going to be an ugly decade or two—starting in a few years as these mines come online. The big 3 players got too greedy and destroyed their industry.

 

His take on the iron ore market bodes well for Posco. A stark contrast to the view that some FT articles and other sources have championed - that there is some new paradigm that allow iron ore miners to take all of the profit in the steel business indefinitely. If prices head down below cost of production, the steel mills, at the very least the most cost-effective ones, depending on where steel demand is heading, can be minting money in a few years.

[alwaysinvert]

http://www.financeasia.com/News/356790,posco-sells-743-million-of-treasury-shares.aspx

 

I'm not sure how I feel about this. The discount seems a bit on the heavy side. Getting the leverage down may be in order, but I thought that they were going to be able to do that sufficiently with cash flows in the coming months. Oh well, at least they didn't sell any stock at the absolute bottom.

 

Not a fat chance that there are Buffett buys in there if he hasn't bought stock in Q2 over the market, but we don't know for sure that he hasn't, I guess.

[alwaysinvert]

Decent bounce today on this news: http://www.steeltimesint.com/news/view/posco-to-operate-russian-steel-mill

 

edit: But apparently this was old news (September 13th), so I have no clue if there is a certain reason why the stock suddenly moved like that today.

[Kiltacular]

http://www.4-traders.com/POSCO-6494927/news/POSCO--First-overseas-export-of-the-cutting-edge-steelmaking-technology-FINEX-method-17302140/

 

POSCO signs MOA with China`s Chongqing Iron and Steel Company to construct a FINEX integrated steelworks... annual 3 million ton scale

 

POSCO`s `FINEX method` which is its self-developed next-generation steelmaking technology, will be exported overseas.

 

On September 22nd, POSCO signed an MOA with Chongqing Iron and Steel Company, a state-run company operated by China`s city of Chongqing, to construct an annual 3 million ton scale FINEX integrated steelworks. Chongqing Mayor Huang Qifan and CEO Chung Joonyang attended the signing ceremony, while Chongqing Iron and Steel Company President Zhu Jianpai and POSCO President Kim Junshik signed the MOA.

Chongqing Iron and Steel Company was established in 1893, and is a state-run company with the city of Chongqing holding 100% of shares, with 22 subsidiaries and an annual 6.5 million ton steel production capacity.

[alwaysinvert]

Here we go again:

 

http://abcnews.go.com/International/wireStory/experts-urge-posco-halt-steel-plant-india-20428855

 

 

[alwaysinvert]

Earnings release:

 

http://www.posco.com/homepage/docs/eng3/dn/invest/archive/2013_3Q_Presentation_eng_final.pdf

 

Q&A:

 

http://www.posco.com/homepage/docs/eng3/dn/invest/archive/2013_3Q_Presentation_Q&A.pdf

 

I don't find anything out of the ordinary to remark on. Chinese market expected to get better, iron ore prices expected to fall somewhat. They do say that there are no plans to sell more treasury shares, but then again, wouldn't they say that no matter what?

[Kiltacular]

CEO resigns

 

http://www.reuters.com/article/2013/11/15/us-posco-management-idUSBRE9AE09020131115?feedType=RSS&virtualBrandChannel=11563

 

[MrB]

I wonder what the recent spike is about. More iron ore input means more output for Posco.

 

[alwaysinvert]

On schedule: http://www.steelorbis.com/steel-news/latest-news/posco_pt-krakatau-jv-starts-operation-803264.htm

 

This is still at least a double for me in a few years. More than that if iron ore gets really cheap again. Cheapest stock that I own.

[ASTA]

Thanks racemize,

13-F:

 

http://www.sec.gov/Archives/edgar/data/783412/000143774914001834/xslForm13F_X01/rdgit012814.xml

 

where I found it was posted:

http://www.rationalwalk.com/?p=13517

 

Well I was lucky last year to invest at the lowest point off the year so I am up 8%

still nice to see Munger likes this company :D 

[alwaysinvert]

Thanks racemize,

13-F:

 

http://www.sec.gov/Archives/edgar/data/783412/000143774914001834/xslForm13F_X01/rdgit012814.xml

 

where I found it was posted:

http://www.rationalwalk.com/?p=13517

 

Well I was lucky last year to invest at the lowest point off the year so I am up 8%

still nice to see Munger likes this company :D

Thanks.

 

Should be interesting to see if there are any increases in PKX in the coming quarter with the weakness in share price compared to the other names.

 

Two foreign companies should (as the article says) indicate that at least part of what's undisclosed is BYD, but there could be some more Korea-listed Posco hidden in there, I guess.

[alwaysinvert]

Posco is near multiyear lows and iron ore prices are plummeting.

 

http://www.ft.com/intl/cms/s/0/62b16f54-a859-11e3-8ce1-00144feab7de.html#axzz2vZhhNmLc

[gary17]

I've looked at POSCO before and I don't like that they are the first to be affected if China is slowing down and also the first to be affected if Iron Ore and energy prices are high - it just seems like there's no good way to win to be a producer when you could be hurt on the product demand and the material supply sides.  If China's real estate bubble bursts POSCO could go down a lot more.  Gary 

[alwaysinvert]

I've looked at POSCO before and I don't like that they are the first to be affected if China is slowing down and also the first to be affected if Iron Ore and energy prices are high - it just seems like there's no good way to win to be a producer when you could be hurt on the product demand and the material supply sides.  If China's real estate bubble bursts POSCO could go down a lot more.  Gary

Maybe it could, but I don't see where in the fundamentals that is supported, really. It doesn't seem likely that iron ore prices will go up while steel demand comes  to a halt, especially if you consider the price action in iron ore in the last few years and how much new supply that has come because of it. Posco is still profitable at these historically low utilization levels and they could go still a bit lower before things are problematic for them. What will happen if Chinese steel mills are shutting down while the iron ore price goes lower?

 

There probably are pockets of bubbles in China, especially when it comes to real estate valuation. That doesn't mean global steel consumption won't be higher in 10 or 20 years as hundreds of millions of people are heading towards urban areas - just in China. Where the price of PKX or steel bottoms out in the interim, I wouldn't even dream of guessing on.